President Donald Trump’s plan to impose widespread tariffs on foreign goods aims to encourage foreign manufacturers to produce their goods in U.S. factories and employ American workers.
During a recent interview with the conservative network Newsmax, Trump claimed that this effort has already yielded results.
“We have automobile plants being built at levels we’ve never seen before, and they’re going up fast,” Trump said on March 26.
When asked for evidence, the White House pointed to recent expansion announcements from carmakers Hyundai, Stellantis, and Honda.
However, automotive industry experts argue that Trump overstated the situation. In most cases, these announcements involve reallocating investments at existing facilities rather than building new plants. Additionally, these plans may or may not materialize.
Dimitry Anastakis, a business history professor at the University of Toronto and author of the 2024 book *The North American Auto Industry since NAFTA*, noted that it is premature for the president to take credit for plant expansions given his short time in office. “Plants are planned years in advance,” he said.
No data has been found to confirm that the recent announcements represent a record level of automotive manufacturing investment.
Which carmakers have announced new investments recently?
Three foreign-based carmakers have recently announced significant investments in U.S. production.
Hyundai: In February, the South Korean carmaker announced plans to increase production capacity at its Metaplant in Georgia from 300,000 to 500,000 vehicles annually, producing both electric vehicles (EVs) and hybrids. It also plans to boost output at its Alabama plant, which currently produces 356,100 vehicles per year.
In March, Hyundai announced at a White House event that it was initiating a roughly $21 billion investment in the U.S., including a $5.8 billion steel plant in Louisiana to supply materials for its EVs.
Hyundai Motor Co CEO Jose Munoz told Axios that “the best way” for the company to “navigate tariffs is to increase localization.”
Honda: In March, Reuters reported, citing unnamed sources, that the Japanese carmaker would manufacture its next-generation Civic hybrid in Indiana instead of Mexico.
Honda had initially planned to produce the next-generation Civic in Guanajuato, Mexico, starting in November 2027. However, it now plans to build the new Civic at an existing plant in Greensburg, Indiana, beginning in May 2028, with an expected annual production of 210,000 vehicles.
Stellantis: In late January, the Dutch company, which owns Chrysler, Jeep, Fiat, and other brands, announced a $5 billion investment in the U.S., including reopening an assembly plant in Belvidere, Illinois. The plant, which once produced Jeep Cherokees, had been closed since February 2023. The company now plans to manufacture midsize trucks there starting in 2027.
Why experts say caution is warranted
A closer examination of the three companies’ announcements reveals differences from Trump’s claims.
First, these are plans set to occur several years from now, meaning the companies could modify them before implementation.
Second, none of the moves involves “automobile plants being built,” as Trump stated. Instead, they involve increasing production at existing plants or reopening a closed facility. Hyundai’s planned Louisiana steel plant will supply materials for EVs.
Greig Mordue, a manufacturing policy professor at McMaster University, suggested that companies like Hyundai, Honda, and Stellantis are likely accelerating already planned launches to adapt to political realities.
“They will be looking at models nearing the end of their natural cycle, which occurs at five-year intervals, and preparing to announce ‘investments’ to continue the new version of the model at those plants,” Mordue said. “Those launches can be positioned as ‘wins’ for Trump.”
Auto manufacturing investment was on the rise before Trump
No long-term data was found to contextualize the scope of the recent carmaker announcements, but the past few years have seen a resurgence in automobile manufacturing investment, particularly in EVs.
From 2000 to the end of September 2024, companies announced $208.8 billion in EV manufacturing investments, creating about 240,000 jobs, according to Atlas Public Policy, a Washington, D.C.-based research and consulting firm.
Experts attribute this growth in part to two laws signed by President Joe Biden: the Bipartisan Infrastructure Law and the Inflation Reduction Act, which provided federal incentives to strengthen U.S. manufacturing.
Of the $208.8 billion in investments tracked by Atlas, more than half were announced after Biden signed the Inflation Reduction Act in 2022. About three-quarters of that investment was under construction or operational by October 2024, the group said.
“It’s clear that this is part of an ongoing, multi-year upward trend,” said Atlas founder Nick Nigro.
Other manufacturing sectors have also seen significant growth since the passage of these laws. According to the Treasury Department, overall manufacturing construction spending, adjusted for inflation, has doubled since the end of 2021.
The Trump White House downplayed the value of Biden-era investments, citing a Financial Times analysis that found roughly 40% of investments funded since the Inflation Reduction Act and the CHIPS and Science Act were paused or delayed, totaling $84 billion.
The White House also pointed to news reports of auto manufacturers, including Volvo, Ford, and Mercedes-Benz, abandoning EV goals in 2024.
However, the same uncertainties that affected past planned investments could also impact recent announcements. Building a plant or increasing production at an existing one can take years, and it remains to be seen whether these plans will come to fruition.
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